Opinion
No. 35095.
November 2, 1942. As Modified on Denial of Suggestion of Error, November 16, 1942.
1. MECHANICS' LIENS. Sales.
In action to recover purchase price of a butane gas heating and cooking system and to establish mechanic's lien on premises where installed, defense that seller agreed in writing to retake the gas system in satisfaction of debt was not established where the alleged agreement was not signed by the seller and was merely a consent to enter premises to retake the system.
2. SALES.
In action to recover purchase price of gas heating and cooking system, burden was upon purchasers to establish the affirmative defense that seller had agreed in writing to retake the system in full satisfaction of the debt and to show that such agreement was executed by one having authority to bind the seller.
3. SALES.
In action to recover purchase price of gas heating system, evidence that at the time the order for the plant was executed seller's salesman verbally agreed that if purchasers were not satisfied seller would retake system in full satisfaction of the debt, was improperly admitted where such affirmative matter had not been set up by special plea or notice.
4. MECHANICS' LIENS.
Generally the retention of title to personal property does not of itself waive mechanic's lien on the realty to which the personal property is attached if such lien would otherwise attach (Code 1930, sec. 2258).
5. FIXTURES.
In determining whether personal property attached to realty becomes a "fixture" and part of the realty, the intention of the parties is of paramount importance.
6. MECHANICS' LIENS.
Where a contract under which a butane gas heating and cooking system was installed provided for retention of title as security and that equipment should remain personal property, the seller "waived" whatever lien on the realty to which the system was attached it might otherwise have had (Code 1930, sec. 2258).
7. FIXTURES.
Where butane gas heating and cooking system was installed in a home under contract providing for retention of title as security and that equipment should remain personal property, seller's action to establish and enforce mechanic's lien on the building was not a "waiver" of provision that system should retain its character as personal property, since such provision was mutually beneficial to seller and owner of realty, and could not be waived without consent of owner of realty (Code 1930, sec. 2258).
8. MORTGAGES.
A seller of a butane gas heating and cooking system, installed in a home under contract providing for retention of title as security and that equipment should remain personal property, was not entitled to establish a lien on the home as against beneficial owner under a trust deed, where seller had actual and constructive notice of the deed and it was not shown that the installation of the system was necessary to enjoyment, or use, or preservation of the home (Code 1930, sec. 2258).
APPEAL from the circuit court of Simpson county, HON. EDGAR M. LANE, Judge.
Harold Cox, of Jackson, and J.B. Sykes, of Mendenhall, for appellant.
The lower court erred in awarding the mortgagee, Everett, a directed verdict without proof of his claim and lien on the property.
Billups v. Becker's Welding Machine Co., 186 Miss. 41, 189 So. 526; Town of Ackerman v. Choctaw County, 157 Miss. 594, 128 So. 757; Mississippi State Highway Commission v. Hillman, 195 So. 679, 189 Miss. 850, 198 So. 565.
The court erred in refusing to award appellant a directed verdict against the makers of the note in suit.
Planters' Lbr. Co. v. Sibley, 130 Miss. 26, 93 So. 440; J.B. Colt Co. v. Black, 144 Miss. 515, 110 So. 442; New Home Sewing Mach. Co. v. Moody, 189 Miss. 628, 198 So. 550; Edrington v. Stephens, 148 Miss. 583, 114 So. 387; Allen v. Grenada Bank, 155 Miss. 91, 124 So. 69; Yazoo M.V.R. Co. v. Fulton, 71 Miss. 385, 14 So. 271; Foster v. City of Meridian, 150 Miss. 715, 116 So. 820; Whittington v. Cottam, 158 Miss. 847, 130 So. 745; Traders' Security Co. v. Sullivan, 147 Miss. 72, 112 So. 869; Bank of Lena v. Slay, 176 Miss. 825, 170 So. 635; Mechanics State Bank v. Tuf-Nut Co., 185 Miss. 589, 188 So. 278; Home Owners Loan Corp. v. Wiggins, 188 Miss. 750, 196 So. 240; Baum v. Covert, 62 Miss. 113; Mulholland v. Thompson-Houston Electric Light Co., 66 Miss. 339, 6 So. 211; Crumbley Grocery Co. v. Ferguson, 159 Miss. 861, 132 So. 737; Frederick v. Smith, 147 Miss. 437, 111 So. 847; Miss. Code of 1930, Sec. 2258.
The appellant is entitled to a lien on this record against appellees' entire home place, which is urban property. The improvements were fixed and permanent and were of the character recognized by this court as affording appellant a right to a lien to secure the payment thereof.
Joseph Baum Co. v. Covert, supra; Mulholland et al. v. Thompson-Houston Electric Light Co., supra; Crumbley Grocery Co. v. Ferguson, supra; Frederick v. Smith et ux., supra; Board of Sup'rs. of Lamar County v. Gulf S.I.R. Co., 118 Miss. 243, 79 So. 90; Boyle Gin Co. v. W.F. Moody Co., 188 Miss. 44, 193 So. 917; Code of 1930, Sec 2258, et seq.
The lower court erred in overruling appellant's motion for a judgment, notwithstanding the verdict of the jury under this state of record.
The appellees contend in their brief that the equipment in suit was personalty according to the provisions of the purchase order so providing, and that appellant is not entitled to a lien on the land and all improvements thereon under Section 2258, Mississippi Code of 1930. The court's attention is directed to the fact that the purchase order is dated March 4, 1941. The sale, however, was consummated by the note in suit. By this note, dated March 10, 1941, title to this equipment was allowed to pass from the seller to the buyers and the seller simply held as security such lien as is afforded by statute.
R.C. Russell, of Magee, and Edwards Edwards, of Mendenhall, for appellees.
Counsel for the appellant misconceives the purpose of the defendant in offering the evidence showing that Mr. L.L. Simmons, who negotiated the sale of the property, induced them to buy the same by his statement that if same was not satisfactory his principal, he being the agent of the plaintiff, would receive said property back. This was not a part of the contract of sale, neither was it offered to vary the terms of sale which were in writing, but only offered in evidence to show the reason why the defendant notified the plaintiff that said butane system was unsatisfactory and that in obedience thereto, or responding to said request to come and take said property back, the said agent, L.L. Simmons, and also Mr. Brett, who installed said system, came to repair same and that by this man, Mr. Brett, who installed the system for the plaintiff, a request was sent to the plaintiff to come and repossess or take back said property, and that soon after said word was sent and request made of the plaintiff through Mr. Brett, a man came to the defendants with a written document or order requesting the defendants to sign same which authorized the plaintiff to enter upon the premises of the defendants and to remove therefrom said property. This evidence in no wise varied the terms of the written contract but shows that same was rescinded after its execution by the mutual consent of the plaintiff and defendant which is always permissible under the law.
It was entirely competent for the parties in interest to contract verbally for whatever they mutually thereafter desired. Both parties being sui juris, they could nullify their previous agreement at pleasure. They were the parties solely interested and had the same right to undo verbally that which they had previously put in writing as they originally had to make such writing.
Baum v. Covert, 62 Miss. 113.
The authorities cited by counsel for the appellant have no application to this case for the reason that the offered evidence did not vary the terms, nor tend to vary the terms, of the written contract, but only showed a rescission of same after it had been executed.
This evidence was competent and if the jury believed from the facts and circumstances surrounding this transaction that the defendants did request the plaintiff to receive said property back and that the plaintiff by the procurement of the order offered in evidence and received as competent testimony and marked as Exhibit "A" to Mr. Glisson's testimony, did in fact procure the signature of the defendants to said order, then this was a rescission of the contract.
We desire to call the attention of the court to Section 2258 of the Mississippi Code of 1930, on which the plaintiff bases his suit, and respectfully submit that this section has no application to a state of facts as claimed to exist in behalf of the plaintiff in this case.
It will be seen that it is contended by the plaintiff that he has a materialman's lien on this identical property sold and other property described in the declaration. This he claims under the above statute, and yet it will be seen by reference to "Exhibit A" of the testimony of plaintiff's witness, Mr. McKay, that the sale of the property for which suit is brought was only a conditional sale thereof with reservation of title in plaintiff until all the purchase money was paid. Under the law this reservation of title to personal property conditionally sold creates a mortgage or lien in favor of the vendor thereof. It is a lien created by contract, and not by statute, and therefore the above section is inapplicable. His remedy has been misconceived, if any he has, against the defendants. It will be further seen by reference to said "Exhibit A," called the contract of purchase, that it was stipulated and agreed in said contract of sale, relied upon by plaintiff for his recovery and for a lien to be declared by the court against the property, that said property was to be considered personal property.
The gas comany sued four Glissons as makers of a monthly installment payment note dated March 10, 1941, given it for the purchase price of a butane gas heating and cooking plant, pursuant to a contract for the purchase of such plant dated March 4, 1941. The declaration asked for a personal judgment against the makers of the note and for a mechanic's and materialman's lien on the gas plant and the home of the Glissons, in which the system was installed, and the lot on which the home was situated.
Defendants plead the general issue and gave special notice they would offer to prove that an agent of the gas company, in September, 1941, orally agreed with said purchasers to dis-install and accept the heating and cooking system in satisfaction of the debt, pursuant to which a written agreement was executed between the parties.
The Glissons, by proof but not by plea, also made the defense that when the order for the plant was executed the salesman of appellant verbally agreed that if the purchasers were not satisfied with the system, after use thereof for thirty days, the seller would retake it in full satisfaction of the debt.
There was no denial of the execution of the note, and nothing had been paid thereon. The only defenses were the two above mentioned special agreements.
Appellees failed to substantiate the September agreement as a defense. The writing was not an agreement. It was merely a consent, signed by one of the Glissons, for the gas company to enter the premises and retake the gas system, if it cared to do so, without being guilty of trespass. It was not signed by the gas company, nor was it contemplated that it should be. It is further shown, without dispute, that when this writing came to the notice of the person who had authority to make such agreement that he promptly refused to accede to the arrangement. Furthermore, the evidence wholly failed to show that the person who is supposed to have made this agreement was the agent of the appellant. Appellees did not even know the name of that party, nor whether he had any connection with appellant. This agreement was an affirmative defense and the burden was upon the Glissons to show the fact of its execution by one having authority to bind appellant and the legal sufficiency thereof. Planters' Lbr. Co. v. Sibley, 130 Miss. 26, 93 So. 440; New Home Machine Co. v. Moody, 189 Miss. 628, 198 So. 440; National Cash Register Co. v. Giffin, 192 Miss. 556, 6 So.2d 605. This they failed to do.
The alleged oral agreement by the salesman, made when the order was taken, aside from its merits as a defense, was affirmative matter which should have been set up by special plea or notice. When proof of it was offered objection was made thereto because of the absence of such plea or notice. The objection was overruled but should have been sustained.
The peremptory instruction as to the gas company against the Glissons should have been granted to the extent of a personal judgment against them for the principal of the note and interest and $75 attorney's fees.
Appellees, Everett and Sowell, are beneficiary and trustee respectively in a deed of trust on the house and lot recorded prior to the purchase of the heating plant. They were made defendants to this action. The lower court, upon their motion, excluded, as to them, the evidence offered by the gas company, and rendered a judgment adjudicating that the gas company had no lien upon the building in which the heating plant was installed. Appellant says this was error; that it has a mechanic's and materialman's lien against the house and lot on which it is located, (sec. 2258, Code of 1930), and that its lien is superior to that of Everett. The first question, in this regard, is whether appellant has such lien. Conceding, for sake of the discussion, it would have such lien, unless waived, under Baum v. Covert, 62 Miss. 113, and Mulholland et al. v. Thompson-Houston Electric Light Co., 66 Miss. 339, 6 So. 211, the question remains whether, in this case, the lien exists. The sale contract herein, in addition to retaining in the seller the title to the property sold as security for the purchase price thereof, also provides that "the equipment covered thereby shall remain personal property." Does the last quoted clause, in connection with the other provisions of the contract, prevent the lien attaching? The authorities, with few exceptions, hold that the retention of title alone does not waive the mechanic's lien on the realty if such lien would otherwise attach. 36 Am. Jur., p. 135, # 205; 40 C.J., p. 324, sec. 427; Annotations 58 A.L.R. 1122 and 65 A.L.R. 305. Our research has disclosed no case exactly in point. In re Williamsburg Knitting Mill, D.C.E.D. Va., 190 F. 871, the vendor of an installed sprinkler system had not recorded his contract, and the court held that as between such vendor and a subsequent, innocent mortgagee of the building in which the system was installed, the system became a fixture and the lien of the mortgagee on the building, with the fixture, was superior to that of the vendor as against the sprinkler system under the recording statutes of Virginia, notwithstanding the sale contract stipulated that the system should remain personal property. This case also involved the federal bankruptcy law, the owner of the mill being in bankruptcy. In Phillips-Michigan Co. v. Field Body Corporation, 221 Mich. 17, 190 N.W. 682, the contract, after retaining title to the sprinkler system, and stipulating it should not become a fixture but would remain personal property, contained this provision: "But the said first party, if it so elect, may at any time declare said system to be the property of the said second party and avail itself of any lien or supply law or other remedy." Naturally the institution of the suit to enforce a mechanic's lien on the building was an election under the foregoing quoted provision. These cases have little bearing upon the question. The question is of first impression in this state and will have to be determined by general principles. In determining whether personal property attached to realty becomes a fixture and a part of the realty the intention of the parties is of paramount importance. The other tests derive their chief value as evidence of such intention. Love v. Union Central Life Ins. Co., 168 Miss. 408, 150 So. 794; 22 Am. Jur., p. 718, sec. 6, and authorities in note. By the agreement in this case the parties clearly expressed their intention that the heating plant should remain personal property until the price therefor was paid. Such a contract is good between the parties. 2 Jones on Liens, 3d Ed., p. 739, sec. 1500; Rockel on Mechanic's Liens, p. 738, sec. 1500; 36 Am. Jur., p. 147, sec. 230. If the annexed articles remain personal property, the foundation for such property becoming a fixture and part of the realty is absent. We hold that under this contract the seller waived whatever lien on the building and lot he might have had otherwise. If it be said the seller, by his action to impress and enforce a lien on the building, has waived the provision, the answer is that he has no right to waive it without the consent of the owners of the realty. It is a mutually beneficial provision. It is greatly to the interest of the owner that no such lien exist on the realty.
The prior trust deed on the house was on record and appellant had constructive notice thereof. In addition, the undisputed proof is appellant had actual knowledge thereof. Nor is it shown that the installation of this system was necessary to the enjoyment or use or preservation of this residence. The secured debt showed on its face it had two years longer to run, distinguishing this case from Billups et al. v. Becker's Welding Machine Co., 186 Miss. 41, 189 So. 526. The lower court was correct in holding appellant had no lien on the building and lot and that Everett's trust deed was a first lien thereon.
Whether the gas company has a purchase money lien, with right of enforcement thereof, against the equipment sold and installed by it, is not presented by the pleadings nor discussed in the original briefs herein, and is not involved in this case, and we express no opinion thereon.
Reversed and remanded.